2.04.2016, 11:25:00 AM

Finance Fox: The Future of Insurance?

It
is common for North American insurance companies to take inspiration from international
markets. One new product of interest is Switzerland based, FinanceFox.
From an app that you download on your phone, you can compare insurance
companies and receive personal advice. Finance Fox advertises that you
can compare insurance policies from different insurers and across multiple
lines of insurance from their app. The customer pays nothing, and Finance
Fox receives payments from the insurance companies “for reducing administrative tasks and managing insurance contracts on their behalf.”
This is typically a broker’s fee that is anywhere from 8% to 15% of the
premium. The user appoints Finance Fox to be its personal broker, so that
the company can represent the user in any insurance matter. As with many benefits that get renewed every year, the company likely has the opportunity to realize a larger profit margin as customers renew policies.

So
the question then becomes, is this viable for the US market? We certainly
see current insurance companies putting out their own apps, but we rarely see
on that tries to compare products from multiple companies, let alone act as a
broker. In order for this product to take hold in the US, we have
identified several issue areas that would have to be addressed:

Multiple state licensing requirements

Licensing requirements across different lines of insurance

The practicality by the user of reviewing insurance documents over a small screen

Clarification regarding issues of procurement

Multiple state laws regarding agency

Ensuring adequate communication so that the customer receives the policy he or she requests

Data Security

Our economy is pushed by innovation. This online marketplace for multiple policies across multiple insurers is a novel concept. Hopefully, we can learn from the European market response whether this concept is worth pursuing in the United States.